Results 1 to 25 of 25
  1. #1
    Join Date
    Sep 2005
    Location
    In canada
    Posts
    3,213

    * What with companies going down ??

    This year 2007-2008 range, i have seen like 3 companies going down which dealt with servers.

    2006-2007, i did not notice the trend ,only saw 1 company going down.

    Now what is happening here ? Why the increase in number of closures/bankruptcy ?

    Are there more players jumping into hosting who have no clue how to work their company or just too much competition ?

    wont name companies but those who follow the wht trend already know about them.

    So whatsup with that ?

  2. #2
    Join Date
    Apr 2007
    Location
    UK
    Posts
    121
    Maybe the US recession is affecting some?
    I write content. Particularly tech and hosting content.

  3. #3
    Join Date
    Apr 2008
    Location
    New York, NY
    Posts
    240
    I would say the economy is hurting right now. Potential clients are asking for the world and only willing to pay a shiny penny.

    The markets just not in the best of shape I don't think.
    ePhase Networks L.L.C.
    Absolute Hosting Since 2007
    http://www.ephasenetworks.com

  4. #4
    Join Date
    Mar 2001
    Location
    Denver, CO
    Posts
    43
    Bad economy + more competition = BAD
    Peakhost.com Hosting
    Quality hosting since 2001
    http://peakhost.com

  5. #5
    Join Date
    Sep 2005
    Location
    In canada
    Posts
    3,213
    Quote Originally Posted by Peakhost-Rob View Post
    Bad economy + more competition = BAD
    I thought that competition was a good thing, but i think we have overdone that, and saturated the hosting market that its hard to breathe !!

  6. #6
    Join Date
    Mar 2004
    Posts
    461
    It’s been oversaturated for a while (though yea it is worse than ever), like many other host here mention it’s all about that niche.

  7. #7
    The market is saturated, the wants and needs of customers today is not about just pricing and features offered anymore, its more about technical support, a lot of hand-holding, etc.

    Spam, spoofs, phishing, virus, worms, and other internet distractions eats up sysadmin time, call center time, and slows development resources, which in turn increases overhead costs..

    An oversaturated market, with thin profit margins, causes many smaller hosts to give up and spend their time on a new venture that has a better payoff.

    So yes, web hosting companies are going "down" with more to follow..

  8. #8
    Join Date
    Nov 2005
    Location
    Boston
    Posts
    816
    Lots of companies are fly by night. They are one individual who dosent stay the course. Its unfortunate but true.
    Dimension Servers / Toll-Free: 1-888-750-6942
    RapidSSL Cert Included with ALL Reseller & Ultra Accounts
    24x7x365 Unbeatable Technical Support!
    Shared CPanel Hosting // Reseller WHM Hosting Solutions

  9. #9
    I don't know of any reasonable sized companys that have "failed".

    I would imagine its mostly done to mismanagement.

    Unless you have any examples of the ones that have gone under.
    Data Republic - UK Managed Servers - Server Management - Managed Backup/R1Soft
    Follow us on Twitter to get exclusive sales & updates.
    R1Soft Agents Monthly !

  10. #10
    Join Date
    Apr 2006
    Posts
    919
    The resellers are companies?

  11. #11
    Join Date
    Jul 2002
    Location
    London, United Kingdom
    Posts
    4,366
    Go bck 10 years and those providomg hosting did so off their own networks, with their own staff, and had a clue how to support the clients.

    Along comes the reasonable priced dedicated server industry and overnight thousands of wanabe "hosts" arriveall thinking they're going to millionaires by the end-of-the-week

    As prices reduced and offers got increasingly insane by the server providers, the "barriers" to entry got lower and lowerr, allowing more and more unrained fly-by-night muppets to become web hotsing providers

    There was a shift on reseller accounts from them being a mangement tool to keep all of a designers clients together to "become a webhost now for $2.99/month" adverts in every magazine and all over ebay - more and more "hosts" come along

    the advent of "master reseller" meant even these hosts could have sub-hosts, "alpha master reseller" (WTF doe sthat even mean ?) allows them to offer master resellers themselves, overselling and overpromising and underdelivering becomes almost standard.

    The majority of "hosts" I see on places like WHT fall into 3 cams - thsoe doing it properly for the long-haul, those doing it ok for now, but will hit a sumbling block that they *may* fall at sometime in teh next 6 months, and the 13 year olds who want extra sweets on the way home using their $29 template, a rented billing/support app, a bit of bobscares and as soon as it actually ooks like it'll be some work to manage the the 13000 sites they've sold for $0.01/life on their "unlimted super-dopper alpah-aomega-oversold-up-the-ying-yang" reseller account vanish without a trace ...

    It's just one of those things - as soon as the pie looks big enough, a million people turn up with forks ... my best-guess is that in 2 years time 99% of the current "hosts" simply will have ceased to be, and maybe 20-or-so much larger hosts remaining in their place, each with a speciality/distinct persona.
    Rob Golding Astutium Ltd - UK based ICANN Accredited Domain Registrar - proud to accept BitCoins
    Buying Web Hosts and Domain Registrars Today @ hostacquisitions.co.uk
    UK Web Hosting | UK VPS | UK Dedicated Servers | ADSL/FTTC | Backup/DR | Cloud
    UK Colocation | Reseller Accounts | IPv6 Transit | Secondary MX | DNS | WHMCS Modules

  12. #12
    It's just one of those things - as soon as the pie looks big enough, a million people turn up with forks ... my best-guess is that in 2 years time 99% of the current "hosts" simply will have ceased to be, and maybe 20-or-so much larger hosts remaining in their place, each with a speciality/distinct persona.
    I would have to disagree, but everyone has their own opinions. A lot of small business have been in the industry for more than a few years focusing on a niche market, and they will continue to exist as long they are dedicated to what they do. The bigger corporations will never be able to cater to their customers like some of the smaller companies do.
    Last edited by WireNine; 05-13-2008 at 10:38 PM.

  13. #13
    Join Date
    Jul 2005
    Location
    Edinburgh
    Posts
    3,878
    Like everything else in this world..it's survival of the fittest.

    Cest La Vie.

    owm
    ‹(•Ώ•
    Life's what you make it.

  14. #14
    Join Date
    Sep 2005
    Location
    In canada
    Posts
    3,213
    Quote Originally Posted by Outlaw Web Master View Post
    Like everything else in this world..it's survival of the fittest.

    Cest La Vie.

    owm
    Oh noez, bunny needs to start pumping some iron than

    @Dixtech1 why are resellers not companies? Everyone resells servers from someone else right ?

  15. #15
    Join Date
    Dec 2007
    Location
    Indiana, USA
    Posts
    16,087
    Quote Originally Posted by Dixtech1 View Post
    The resellers are companies?
    If you think about it, unless every host were to *OWN* it's own upstreams and downstreams, datacenters, and servers, then they are reselling in some form or another. Datacenters resell their upstream/downstream connections to those who have servers in the datacenter. Those who have servers in the datacenter often sell space on those servers to people, and then sometimes it goes one or two more levels down, depending on the server, and the companies involved.

    If you were to say that resellers are not companies, you'd be saying that nobody in the hosting business is a company because I am not aware of a datacenter that sells hosting directly and *OWNS* all of their upstream/downstream connections.

    I understand that you were probably referring to those who go to XYZ company and apply for an XXXgig/XXXtransfer account on a server for the purpose of reselling... The thing you have to remember is that everybody starts somewhere - Microsoft certainly didn't start out as a multi-billion dollar company for example.


    Quote Originally Posted by Outlaw Web Master View Post
    Like everything else in this world..it's survival of the fittest.

    Cest La Vie.

    owm
    This is definitely the truth, but I think that some of the problem is just due to the low cost of entry into the business. The web hosting industry is so saturated you can almost find the world for pennies even when it comes to a reseller account. Most clients who expect the world for pennies do not expect to encounter the amount of real work that comes along with running a web hosting company so they often bail out. The type of person who bails out on such an endeavor is often not the type of person who really cares about their clients or one that would notify them in advance and help them move to another service.

    Quote Originally Posted by Energizer Bunny View Post
    Oh noez, bunny needs to start pumping some iron than

    @Dixtech1 why are resellers not companies? Everyone resells servers from someone else right ?
    True, as stated above.
    Michael Denney - MDDHosting LLC
    New shared plans for 2016! Check them out!
    Highly Available Shared, Premium, Reseller, and VPS
    http://www.mddhosting.com/

  16. #16
    Join Date
    Mar 2004
    Location
    Singapore
    Posts
    6,984
    I am not sure about other countries, in Singapore, prices doubled while power consumption per rack was more than halved. So for those who are just surviving on razor thin margins are affected badly. I am not sure about one or two years, but having been in this field for 11 years. I do know that those that started out around the same time as me, most are history. The attrition rate is very high.

  17. #17
    Join Date
    Mar 2008
    Location
    Texas
    Posts
    70
    Well almost every reason has been stated already, but most of the time the one that goes out is the small host that didnt have enough income to cover there cost, or it was the small kid on a adventure to try to sell hosting. Then just drop all the clients without warning.

    Most of the already big companies are big companies either,

    A: There marketing and niche groups are that good to handle. or
    B: They have been around for like 50 years and were around when getting customers was easier because there were not like 15,000 host to pick from.

    There are alot of factors, but another main reason is probably because of the econemy, use to at least if you hit a bump in the road you could take some out of your own pocket. Now most host "have" to meet there bills paid by with clients. So.. it just depends..
    BlueWire-Hosting - Well priced, and affordable hosting. With a helping staff and blazing support!
    cPanel/WHM • RvSkins • Fantastico de Luxe • 24/7 Support
    PHP5 With Rewrite for PHP4 • SiteBuilder • Ruby On Rails • Perl • mySql
    | Custom Plans Available | Resellers | Shared |

  18. #18
    Join Date
    May 2008
    Posts
    52
    Barrier of entry.
    All you really need to know is how to install linux/windows and install apache, mysql, cpanel etc....
    No college degree needed.

    and outsourcing... the company who don't outsource will need to pay higher cost.
    But i hate outsourcing, i've talk to people who didn't even know what they were talking about. waste of time and money.

    then too much competition drive down the price and no profit to be made. time to get out of the market.
    Last edited by vinboy; 05-14-2008 at 10:25 AM.

  19. #19
    Join Date
    Mar 2003
    Location
    Kansas City, Missouri
    Posts
    462
    Well here's my two cents:

    The economy is in a "recession" but really that hasn't stopped data centers (at least not ours). Most high-class data centers provide managed services to clients of larger-scale and currently have high numbers for their monthly recurring revenue. These signed contracts enable companies to succeed, even in times of recession. It will be interesting to see what the cost of resources in the future will do to the data center. It looks like we're already trying to promote a greener data center... what next? I'm a large advocate of virtualization.

    Adam
    => • Admo.net Managed Hosting •
    => Managed Hosting • Dedicated Servers • Colocation
    => Dark Fiber Access to 1102 Grand, Multiple Public Providers
    => Over •Sixteen• Years of Service

  20. #20
    Join Date
    Jul 2005
    Location
    Maine, US
    Posts
    521
    One of the best recommendations to new hosts is to find your niche in the market. We all know it, and most people still don't do it. They think, "Ahh, well I will make something if I sell the normal shared and reseller accounts." For the most part they probably will sell a few accounts but that will eventually get boring or go belly side up ending in bankruptcy.

    My opinion is that new hosts don't have the patients or money to enter into that special niche of the market. It takes time to build when you are not advertising to everyone, which also consumes a lot of money. Only the people with deep pockets or people who know how to run a host with experience can make it.

  21. #21
    Quote Originally Posted by AdmoNet View Post
    Well here's my two cents:

    The economy is in a "recession" but really that hasn't stopped data centers (at least not ours). Most high-class data centers provide managed services to clients of larger-scale and currently have high numbers for their monthly recurring revenue.
    exactly !

    Quote Originally Posted by ephasenetworks View Post
    I would say the economy is hurting right now.
    a down trodden economy should be nothing but wonderful for hosting providers. More and more companies will look to outsource their requirements in an effort to lean their operations and focus on their core competencies...

    I remember that we started our business right smack in the middle of the dot com bust. Everyone thought we were nuts. There is massive opportunity now, more so then 3-4 years ago...

    Potential clients are asking for the world and only willing to pay a shiny penny.
    well, this is the problem. A service can not be run on razor thin margins. the toughest thing to do (but also the most important) is to turn away unprofitable business or business that looks to be offering razor thin margins. It is completely unsustainable. A customer shopping for such deals is not a good customer to have - these sorts of things need to be a partnership - and if 1 partner is insisting terms that could seriously hinder another partner - then a good partner they are not...

  22. #22
    There is always money to be made out there... But most of the companies that go down tend to be new companies who:

    1) Buy huge bandwidth commitments and can't keep up with those commitments and have to close up shop.
    2) Resell services
    Managed Virtual and Dedicated Servers Los Angeles - KEVWORKS
    Now with Level(3), Mzima, Telia, Global Crossing and Bandon

  23. #23
    Join Date
    Sep 2005
    Location
    In canada
    Posts
    3,213
    Quote Originally Posted by kevworks View Post
    There is always money to be made out there... But most of the companies that go down tend to be new companies who:

    1) Buy huge bandwidth commitments and can't keep up with those commitments and have to close up shop.
    2) Resell services
    You guyz keep saying money to be made, but the city i live in aint got no datacenter, and deploying a serber in us datacenter becomes costlier cause of setup fee, shipping fees and what not, so for like those living in small city where serber resources are low how can those make some green ?

    I have seen those living close to datacenter only growing bigger and stronger, am yet to see someone doing that from like 50000 miles away !!

  24. #24
    Join Date
    May 2006
    Location
    The PitLane
    Posts
    2,874
    It is indeed a tough world for any business, not just the hosting industry.

    I'd agree with most things people have said, and would add that:
    there will always be successes & failures in business.

    Big BUT: There is never any excuse to simply walk[or run] away from a business thats failed,
    just have the common decency to, as a minimum, tell your clients that you have to shut the doors, pull the plug, or whatever.
    If your able, guide your clients to an alternative provider, in the long run it will make commercial sense, as you may want to re-establish yourself in business and, even if you cant keep the client, you can keep your reputation.

    Many of you know what I think of the 'Scum that Run' !
    _____________________________________________________________
    - There are many types of Marmalade -

  25. #25
    Join Date
    Jun 2007
    Posts
    573
    I think pricing has affected alot of those companies as well. Everything else is getting more expensive but webhosting companies are coming out with cheaper and cheaper products. Unlimited resources seems to be the rage and that comes at a heavy price to performance and reputation. Unlimited has its own niche and some companies can make it work (nobody knows the long-term impact of it). We gladly send all unlimited sales inquiries to the companies that offer it.

    Last year it was a deluge of VPS companies, this year, dedicated server pricing has dropped dramatically. Webhosting always has a high turnover rate.
    Last edited by imountain; 05-15-2008 at 10:06 PM.
    :•: iMountain.com Solar Powered Hosting - Same location for 20 years
    :•: Clustered, HSphere, Webhosting, VPS, Dedicated and Luxury clusters
    :•: Specializing in Database clustering and optimization for vBulletin, Joomla and Wordpress sites.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •